Cornwall

Milena Cardinal LL.L., J.D. and Derek McEwen
 
Francois: We're starting off with Derek McEwen from Storm Realty, Cornwall and Milena Cardinal from Cardinal Law and Cornwall. I've heard great things about these people. I personally invest in Cornwall. It's a great market, but I look forward to chatting with this power team. If you are looking to invest in Cornwall there's part of your power team you're just missing. It'd be a home inspector, mortgage broker, but the REITE club does have everything.

Daniel: Don't forget Francois, if you know these two people and you work with them, they will find a property manager. They will find the inspector. They will find whatever you need.

Francois: Exactly, that's the importance of having the right people on your team and people with the right attitudes. I'm very excited to have you guys. Welcome. That's a perfect team. I like them when they're quiet.

Milena: Thank you Francois and Daniel. Oh my God, you guys always have a talent for making me blush.

Francois: Me too I get a nice blusher. When we're pasty white, we need that blush. Milena, you're the first victim. I'm going to alternate between questions. What are three key people you work the most with that make a good power team? What's a power team to you?

Milena: Only three, really. Okay.

Francois: You can have more. That's good.

Milena: I guess maybe just the start for those who haven't heard from me before. I'm a lawyer, but I'm also an investor myself, which is actually what got me to this club, which I'm extremely grateful for what a phenomenal resource. I guess I work collaboratively with a lot of different people.

I mean that obviously mortgage broker for the real estate portion, I guess mortgage broker, accountant. I like real estate coaches who are phenomenal people to partner up with real estate agents of course. That's how Derek and I know each other. But on top of that because not only is my law firm a business, but also Real estate investments like a business.

I also have an economical financial advisor, an accountant, and a business coach. All of which not only work with me, but all work with one another, which is really phenomenal because it makes me feel like my foundation is extremely solid.

Francois: It's all integrated. That's great because they know your portfolio and everything. Your strategy inside out. And that's the important part of having this power team. There you go. I learned something. I had three or four people, but you have way more, so that's great, good job. And then Derek, what makes a good investor focused realtor? Because I know you've worked with quite a few investors. What are your top qualities that should be easy?

Derek: First of all, thanks again for having me. It's nice to be back, everybody. As far as things go, working with investors and vice versa, then working with me, I think it's important just to have that mutual understanding of what an investor is looking for. I've been investing in real estate for almost five years now.

I have a very good understanding of what investors are looking for. I understand the local market, how it's changed over the last few years. And even though things are unknowingly having said that going forward we seem to see a trend in how the prices are increasing, how there's a lack of inventory, how tenants are in high demand, looking for rental properties to move into.
All favorable things for investors and potential landlords for the city. Things are looking quite bright for everybody choosing this market to invest in.

Francois: That's amazing. Thank you very much. And then Milena, what do you recommend to your clients when navigating in these crazy markets? Because I'm sure you're very busy.

Milena: Initially when the market really skyrocketed, a lot of people were saying I don't want to buy now. I'm like, no, you have to buy now. I guess that's something that I continue to encourage. And also never guarantee vacant possession of clothing. What else? It really depends on the scenario. Maybe if you can guide me in a bit of a scenario, I can tell you.

Francois: I'm sure, like you just mentioned the whole vacant possession thing. Maybe even less for investors, let's say you're buying your personal home and it was tending to then now what can happen? Surprise. Maybe you can't have possession of your own house and now you're homeless. That's something to consider.

Milena: And that trickles down to because even first time home buyers, how do they get the land transfer tax credit? If you're not moving in within my month, then you lose your land tax.
Dallas has something like this where people won't necessarily think about that, but it can have really serious repercussions. I guess the one difficulty with being investors is the fact that we have to deal with the Landlord Tenant Board and Residential Tenancies Act.

Francois: That brings me to ask you then, is there a paralegal on your team or someone you work with or you do yourself?

Milena: No, I'm not a paralegal. It's not my area of expertise. I strongly believe that everybody should be where they are at their very best. And yes, I do have a paralegal that I absolutely love working with.

Francois: Excellent. There you go. For landlords out there, if you have some issues, you can build your power team and go for more than three people. Thank you very much. And then Derek, so back to you, so what are your recommendations to your clients in this strong market? Like how can we get a property?

Derek: I always recommend that nobody panic when they're looking at a property. I think that with the current marketplace and properties going into multiple offers it's quite easy to lose our focus on what we're trying to do, which is to pick up a property at the lowest price possible.
We can profit the most amount going forward even for investment properties right now. Multi-residential duplexes, triplexes there. Realtors are holding off on offers now and trying to get them to go multiple. And I would recommend that you don't bite on that juicy little worm and get excited about a property because more will follow. There's no question about that. But having said that if the numbers look good, if the cash flow is working properly and the expenses are in check I would figure out what price makes more sense for any individual investor and in maximum to that amount, if they really want it.

If they want to play a longer game, let's say not worry about cash flow as much currently buy look at future profits down the road five years from now. Then if they're in that position, not to worry about cash flow, maybe bid a little bit higher and know that there's a return on investment down the road. But I wouldn't overbid on anything. I just don't think it's worth it.

Francois: Great advice, that was good. Yeah, don't overpay, but if you have a long-term strategy, then that may make sense as well. I knew Daniel St. Jean shared a great story a while ago about some properties he bought and then longer term it did end up being really profitable.
Daniel, sorry, I sold your punch there, but what about investors that are selling Derek? I have two properties in Cornwall I need to sell. What should I do?

Derek: Find a good realtor.

Francois: There you go. Good realtor.

Derek: Just basically it depends on the property, the location and all that. And how it's tenanted basically if you're not having any problems with your tenants that's obviously a great start. Maybe let them know beforehand that you are selling.

Francois: You don't leave the tenants there and then surprise. There's a for sale sign in front of the building.

Derek: They might not like that very much. Yeah, just get all your numbers in order and show how favorable your property can be present in the listing. Any updates that have been done in the recent years. The age of the roof, if you've changed your furnace, if you took the time to upgrade a property. Let's say you bought a property in a lower condition and you did put work into it in the interior which attracted higher paying tenants. And now, you know that there's a better return for yourself when you sell and good cash flow for a new investor coming. Yeah, just have all this information available going forward and I'm sure you'll be able to sell your properties easily.

Francois: Excellent. Thank you. And Milena, horror stories. Do you have some good horror stories to share?

Milena: I do. I actually was thinking about that because Daniel had suggested that maybe I should come up with some stories. I actually have a really good story and a really bad story that kind of happened at the same time. I guess one of the worst circumstances of bad collaboration that I've seen was that I was asked to represent a client who wanted to buy a parcel of land and we'll call him Bill and Bill found the parcel of land that he wanted, and he saw a for sale sign.

He knocked on the door of the seller. And they struck a deal right then and there. And then, because he didn't have a real estate agent because he just walked over to the seller. He was happy to work with the realtor that was representing the seller. I guess he felt like the realtor wasn't really working in his favor and I don't know if there was a breakdown in the relationship between the realtor and the client. I'm not exactly sure. But then the seller needed to sever the land from the house in order to sell the land separate name, separate, because that actually went very smoothly. That was fine.

And then but the agreement wasn't clear as to when the closing was actually going to take place. The other lawyer and I got on the phone and figured out, okay, let's call January 31st. We called our clients. Everybody was in agreement, everything was running really smoothly. And I had called a real estate agent before I missed that part.

I'd called a real estate agent before calling the lawyer, asking what the closing date was actually going to be. And I hadn't heard back anything. That's why I called the other lawyer. And then so about a week after we figure out the date and we're all happy, I get one of those cover letters from I don't know if you guys aren't familiar, but the realtor will send a cover letter with an agreement of purchase and sale saying, oh, the other lawyer is this person. You represent this person, whatever.

They sent me the same cover letter that I had already received again, with the closing date of April. Just to be sure, I called my client and I said did you guys read like a different closing date of April 1st? And then with a super panicked answer, he's oh my God, no, not at all. That does not work for you. That's way too late. Like completely panicked. I called the other lawyer and I said, I got this notice and they said, yeah, we've got it too. And no, we're not pending. First they called their client. I guess if the realtor had just returned my call or maybe just discussed it with me, it would have avoided all of this completely unnecessary freaking out by both parties who were extremely stressed out about the situation in a file that was otherwise running very smoothly.

Francois: Everything was going well, but communication is the key. Don't be afraid to speak to your lawyer. You don't seem to bite. I don't know. I'm very open with my team normally. I'm sure your clients, hopefully you advise them to be the same. Like here's what we want and negotiate for us. This is it. It's a conversation and everything should be written as I'm sure. That's great. It's like a horror story, but not too bad. No one died.

Milena: And we did close and everything was fine, but it's just unnecessary stress to the clients. I do also have a really good story of a deal that was supposed to be a complete nightmare. And everybody anticipated it was going to be a complete nightmare. And it was a client that was selling a multiplex. And she had inherited the property. It was a complete nightmare. She did not know what the rents were. She was completely lost. 

There were multiple months where we were as for one tenant, it wasn't the landlord tenant board. And I ended up collaborating with the paralegal that was dealing with the case that the Landlord Tenant Board, the property manager, the realtor and the four of us, like really work collaboratively together to make it work. And in the end it goes very smoothly except that the clients had a really hard time figuring out how to get on zoom actually through the clothing. But other than that, it went extremely smoothly and deal, that otherwise should have been really complicated. And that was thanks to everybody like everybody's willingness to work together.

Francois: Again, teamwork, like that's our theme tonight is teamwork, collaborate with each other, collaborate with your realtor, your lawyer. Great stories. Thank you so much. And then back to Derek, so three things not to do when working with our realtor.

Derek: Oh boy things not to do when working. I think the most important thing is to be dishonest about anything. That could be the worst possible thing. We're talking about illegal transactions here. The last thing you want to do is risk. Any backlash, any legal action against you, if you misrepresent anything about the listing or the property.

Being straightforward as the best thing doesn't become available. There are situations where things move so quickly. Now everything is going multiple. There's a frenzy at times for offers when properties are listed. If you're going to commit to listing your property, please be prepared to be available for discussion of anything that is needed or to be available when offers are being presented.

Third thing, off the top of my head, I can't really think of anything, but I think those two are the most important, just the willingness to be available and be straightforward with everything.

Francois: Excellent. Thank you. And final question for the two of you. Why should we invest in Cornwall and the area? What's good about it? Because we have people like you heard at the beginning from Richmond Hill, from Toronto, from Montreal. And I get asked all the time. Why Cornwall? Why not ask two experts here? Milena, do you want to start first? or Derek, do you want to start first?

Derek: It does matter to me. Go ahead Milena.

Milena: There's all kinds of things that I love about Cornwall, even though I've just recently purchased properties outside of Cornwall, it was fluke. I found some good ones from Cornwall but I really do love working with Cornwall. It is a really attractive community for tenants.

And of course, the law of operating demand, the more tenants we have, the better we can expect our tenancy buildings to go. It's a very attractive community. There's lots of really good jobs. There's a real need for workers right now. Like qualified work. Also Cornwall Electric. We're the only area that isn't on hydro in the vicinity. And so electricity in Cornwall is I think it's about two thirds of the cost of everywhere else. We have flat rate water which means it's way easier. The commute is reasonable to like bigger areas.

The cost of living is just so much less, and we definitely have this like a small town community feel. And there has been a really steady growth until of course this last year where all bets are off, but there has been a really steady growth over the years. There's no reason to believe that it's not going to continue. And so that's why I really love Cornwall off the market. The builders can not build fast enough. There is a huge leap for us.

Francois: Thank you and Derek, what would you say? Why would someone look at Cornwall for investments?

Derek: It depends on how you're looking at investments. You can look at those two ways of investing for yourself, maybe downsizing, moving from a larger city like Ottawa or Montreal or Toronto, even Cornwall is advertising itself. Let's say for the elderly, as a retirement community you have to think that people who can sell their properties in the bigger cities can purchase here for one third of the price of some Montreal properties or Ottawa or Toronto, and still get a very beautiful.

There's also a good retirement. There's many retirement homes as well for that niche, but as far as investing, as far as being an investor and picking up rental properties we're definitely seeing that even though prices are increasing. And we really will continue to do that because of the supply and demand and the migration that's coming in, like Milena referred to, but our prices are still. Even though they've increased so much over the last two years, our prices are still relatively low for Eastern Ontario.

And you can get a bigger bang for your dollar here. What's still very good rental prices, rentals are going up. And so the dollar just stretches more here for an investor than it would in Ottawa, Montreal or Toronto. This is definitely an excellent place to invest in and it's well worth anybody's while.

Francois: Excellent. Thank you so much. This has been very informative. And please stick around until the end for the virtual networking. And I saw some questions in the chat as well. There was one for Milena and one for Derek. Derek McEwen Storm Realty, or you can reach Derek at derek.mcewen@bell.net and Milena Cardinal, Cardinal Law mcardinal@cardinallaw.ca.